Payment giant Mastercard is taking another step to further its involvement in the crypto space, with the objective of growing its core business model. The company will launch a program that will help banks and financial institutions to offer crypto-based products, according to a report from CNBC.
The initiative is one of many undertaken by the payment company to integrate crypto with its business model. Mastercard is allowing millions of people and merchants to use digital assets on their payment rails by swapping crypto for fiat and vice versa. Their newest program will take a similar approach.
Mastercard Wants People Overcome Their Fear Of Crypto
According to the report, Mastercard will launch a pilot program for its initiative during the first quarter of 2023. The initiative will be available for selected banking institutions with the objective of allowing them to launch crypto trading products.
The program will be expanded to other regions and institutions in the coming years. Mastercard will operate as a “bridge” alongside Paxos, a trading platform already offering similar services to companies like PayPal.
In late 2020, PayPal and Paxos announced their partnership to grant people in the U.S. access to Bitcoin and other cryptocurrencies. The partners operate as a bridge between the digital assets, and the investors and handle custody, compliance, and security.
The Paxos and Mastercard deal follows similar terms. According to Mastercard’s Chief Digital Officer, Jorn Lambert, there is significant demand for crypto products. Their program will attempt to remove friction from the process of gaining exposure to these assets.
The payment giant has conducted surveys and other studies to gauge sentiment around cryptocurrencies and concluded that most still want access to these assets. Most people, their studies show, would prefer to gain exposure via their local bank and other financial institutions.
Thus, Mastercard decided to meet this demand with its new initiative. Lambert said:
There’s a lot of consumers out there that are really interested in this, and intrigued by crypto, but would feel a lot more confident if those services were offered by their financial institutions. It’s a little scary to some people still.
Crypto Must Cross This Door To Enter The Mainstream
The payment giant will focus on keeping its clients and institutional partners in compliance with U.S. laws on crypto. In addition, the company will process and verify transactions, and provide a framework with anti-money laundering (AML) and know-your-customer (KYC) policies.
The Mastercard executive believes the current downside pressure across the nascent asset class will not cap its long-term growth. In the coming years, the payment company expects to see a spike in transaction volume from the digital asset class. Lambert added:
It would be shortsighted to think that a little bit of a crypto winter heralds the end of it — we don’t see that. As regulation comes in, there is going to be a higher degree of security available to the crypto platforms and we’ll see a lot of the current issues getting resolved in the quarters in the years to come.